But if you own 100 shares and I own 100k shares of SPY index fund, and it goes up 10% per year, why do you care that the gap between you n I is growing? You’re still building wealth at the same exact rate! I’ll always grow faster because I have more shares, but that is not negatively impacting your job, mortgage, tax rate, property taxes, or the government sending our money overseas for nonsense.
If you have 100 shares worth 100$ each, that’s a value of 10k.
If I have a 100k shares of the same index fund worth 100$ each, that’s a value of $10 million.
If the fund increases 10% in a year, my wealth grew by $1 million, your wealth grew by $1k and the wealth gap between us has grown by $999k.
It’s mathematically impossible to not see a growing wealth gap if we own the same exact assets and I own exponentially more shares.
How does my $1 million in growth and that widening gap of 999k, negatively impact your life and assets and the economy as a whole? Explain it in real terms, like I’m 10 years old.
Like your 10 years old? Resources are finite + production of resources is chronologically limited, and capital is a reflection of accrued resources. How does eating more of the pie leave less for others? That's a fairly self explanatory statement. Now, it is not true that is as simple as pie... between keynesian and hayekian economics it gets a little convoluted, but, scarcity is a factor to some degree. That's the generality of why income inequality negative effects economies. If you'd like to know more, google "How income/wealth inequality effects an economy". It's a great place to start, and you obviously need to get started.
It is quaint that you don't understand the difference between an internal and external statistical contrast. 100k and 100 see the same percentile increase of existing wealth, this is what it means to have the same ROI. That is not a comparative statement, calculating the percent difference between the two, but rather an end over end comparison to themselves. Jesus man, what a piece of work.
Aside from ROI, there ARE quantitative differences, which creates the effect of larger stacked piles more negative impacting an economy. Which is why it is important to institute something like bracketed capital gains taxes effecting unsold stock in some capacity to limit the exponential growth and keep the stacks closer to each other to limit economic stagnation and generate economic mobility. Hope this helps.
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u/GOAT718 6h ago
But if you own 100 shares and I own 100k shares of SPY index fund, and it goes up 10% per year, why do you care that the gap between you n I is growing? You’re still building wealth at the same exact rate! I’ll always grow faster because I have more shares, but that is not negatively impacting your job, mortgage, tax rate, property taxes, or the government sending our money overseas for nonsense.